President Obama’s fiscal 2014 budget request may be moribund on Capitol Hill, but one hot-button proposal buried deep within it appears to be very much alive: Taking a close look at the option of selling off the Tennessee Valley Authority, the government-owned electric utility.
The administration has launched a strategic review that’s delving into issues like “de-federalization,” the implications of a change in TVA ownership for economic development and how to deal with the agency’s assets, according to a rundown of “stakeholder outreach discussion items” provided to FedLine by the International Federation of Professional and Technical Engineers, a union representing about one-fifth of TVA’s some 12,500 employees.
The document, which IFPTE legislative director Matt Biggs said was drafted by the Office of Management and Budget, indicates that an interagency working group overseeing the review is made up of officials from the White House, Treasury Department and TVA. It is marked “pre-decisional and deliberative,” a tactic often used by agencies to shield records from disclosure under the Freedom of Information Act.
As the administration evaluates “a broad range of options to address TVA’s capital financing constraints,” it is “firmly committed to working with TVA’s stakeholders in an effort to better understand and address the interests and concerns of these groups regarding prospective TVA financial strategy alternatives,” the document says.
But in a Friday letter, IFPTE President Greg Junemann said the union got few concrete answers in a call with officials earlier this week. In the letter, addressed to OMB and TVA managers, he sought more information on a dozen points, including exactly how the strategic review will work and whether any recommendations will be run by Congress. “In our view, the belief that the TVA’s mission is no longer essential and is somehow linked [to]the fiscal sustainability of the overall budget is ill-advised,” Junemann said in the letter.
OMB spokesman Steve Posner and other agency officials could not be reached for comment late Friday afternoon.
The TVA, headquartered in Knoxville, Tenn., is one of the best-known legacies of the New Deal, with staunch defenders even among the Republicans who dominate Southern congressional delegations. (Yes, FedLine gets the irony.) But it also faces some well-documented challenges. For the record, here’s what the White House said in its FY14 budget request:
“Since its creation in the 1930s
during the Great Depression, the federally owned
and operated Tennessee Valley Authority (TVA)
has been producing low-cost electricity and managing
natural resources for a large portion of the
Southeastern United States. TVA’s power service
territory includes most of Tennessee and parts of
Alabama, Georgia, Kentucky, Mississippi, North
Carolina, and Virginia, covering 80,000 square
miles and serving more than nine million people.
TVA is a self-financing government corporation,
funding operations through electricity sales and
bond financing. In order to meet its future capacity
needs, fulfill its environmental responsibilities,
and modernize its aging generation system,
TVA’s current capital investment plan includes
more than $25 billion of expenditures over the
next 10 years. However, TVA’s anticipated capital
needs are likely to quickly exceed the agency’s
$30 billion statutory cap on indebtedness. Reducing
or eliminating the federal government’s role
in programs such as TVA, which have achieved
their original objectives and no longer require
Federal participation, can help put the Nation
on a sustainable fiscal path. Given TVA’s debt
constraints and the impact to the Federal deficit
of its increasing capital expenditures, the
Administration
intends to undertake a strategic
review of options for addressing TVA’s financial
situation, including the possible divestiture of
TVA, in part or as a whole.”
